Convergence of U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) has been a high-profile issue for several years. However, in a report released by the Securities and Exchange Commission (SEC) in 2012, the SEC appears to back away from adoption of IFRS, citing significant remaining differences between the two sets of standards as a part of the reason for the shift away from adoption (SEC 2012). The two standard-setting bodies, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), are working to converge on a few more of these differences, but a sizeable number will remain. This paper offers a statement of cash flows assignment that faculty can use to help accounting students develop a better understanding of an often-overlooked financial statement as well as some of the significant differences between the GAAP and IFRS guidance.
This assignment aims to give students:
(1) a better sense of the purpose and structure of the statement of cash flows;
(2) a stronger working knowledge of the applicable GAAP and IFRS standards, and the differences between them; and
(3) additional experience reading and interpreting the GAAP and IFRS standards.

This article is from the Accounting Instructors’ Report, an electronic journal that provides teaching tips and insights to those who teach accounting and other business courses.
Kennard S. Brackney, Ph.D., CPA
Harlan E. Boyles, Professor
Tracy N. Reed, Ph.D., CPA, Assistant Professor, Appalachian State University

Read Target Versus Tesco: Comparing The Reporting Of Cash Flows Under GAAP And IFRS.